Sep 18, 2025
Broad Asset Inflation: Why Everything Rose Together in 2021-2022
Stocks soared. Houses skyrocketed. Gold hit records. Bitcoin exploded.
2021-2022 wasn't just a stock market rally. Everything valuable rose at once. This wasn't a coincidence - it was currency debasement in action.
The Great Asset Price Surge
Between 2020-2022, nearly every asset class gained value simultaneously.
The synchronized rise:
Stock markets hit all-time highs
Housing prices jumped 20%+ annually
Commodities reached multi-year peaks
Cryptocurrencies went parabolic
Gold touched record levels
When everything rises together, the problem isn't individual markets. It's the measuring stick - the dollar.
Housing Market Explosion
Real estate provided the clearest inflation signal.
Housing price data:
National home prices: up 20%+ year-over-year
Some markets: 30-40% gains in 12 months
Median home cost doubled in many areas
Rent increases accelerated nationwide
Why housing matters: Houses can't move. They represent fixed real assets. When house prices explode everywhere, dollars are losing value.
The mechanism:
Fed printed 40% more dollars
More money chased the same housing supply
Prices adjusted upward to match the dollar flood
Housing doesn't create speculative bubbles nationwide. But currency debasement affects every market simultaneously.
Commodity Price Surge
Raw materials told the same story.
2021-2022 commodity gains:
Oil: doubled from $40 to $80+
Lumber: tripled, then doubled again
Copper: hit multi-year highs
Agricultural products: broad price increases
Industrial metals: across-the-board gains
Why commodities rose:
Real assets maintain value during inflation
Production costs increased with the economy-wide price rises
Global supply chains disrupted
More dollars chasing finite resources
Commodities can't be printed like currency. Their prices reflect true purchasing power changes.
Cryptocurrency's Monetary Response
Bitcoin and crypto provided the most dramatic example.
Bitcoin performance:
2020: Started under $10,000
2021 peak: Over $60,000
Total gain: 6x in 18 months
The crypto surge timing: Bitcoin's biggest gains happened exactly during peak money printing. March 2020 Fed announcement sparked the rally.
Why crypto responded:
Fixed supply (21 million Bitcoin max)
Cannot be inflated by central banks
Digital alternative to depreciating dollars
Investors sought inflation hedges
Other cryptocurrencies: Ethereum, Solana, and hundreds of others gained 1000%+ during the same period. The entire crypto market exploded together.
The Dollar Debasement Connection
One factor explains all these simultaneous gains.
The common thread: When you flood the system with new dollars, prices of everything adjust upward. It's not that assets became more valuable - dollars became less valuable.
Think of it like this:
2020: 100 dollars compete for assets
2022: 140 dollars compete for the same assets
Result: All asset prices rise by ~40%
Supporting evidence:
Consumer inflation peaked at 9% (40-year high)
This inflation surge lagged M2 growth by 12-18 months
Classic monetarist theory: increase the money supply, prices follow
Real Assets vs Paper Assets
The broad inflation revealed a crucial pattern.
Assets that surged:
Real estate (tangible)
Commodities (physical)
Stocks (claims on real businesses)
Crypto (scarce digital assets)
Gold (traditional hard money)
Assets that lagged:
Cash (constantly printed)
Bonds (fixed dollar payments)
CDs and savings (low interest rates)
The message? Real assets protect purchasing power. Paper promises lose value during currency debasement.
Investment Strategy for Broad Inflation
The 2021-2022 experience offers lessons for future positioning.
Diversify across real assets:
Stocks (companies can raise prices)
Real estate (finite land supply)
Commodities (physical resources)
Precious metals (traditional inflation hedge)
Bitcoin (digital scarcity)
Avoid cash-like investments:
Money market funds
Low-yield bonds
Traditional savings accounts
Fixed annuities
The key insight: Don't put all eggs in one asset basket. Spread across multiple real assets that benefit from dollar weakness.
Timing considerations: When M2 growth accelerates above a normal 6-7% annual pace, consider increasing real asset allocation.
Portfolio protection: The goal isn't picking the single best performer. It's maintaining purchasing power when currencies lose value.
The 2021-2022 broad asset inflation wasn't a once-in-a-lifetime event. It's what happens every time central banks choose inflation over deflation.
Position accordingly.
